ABSTRACT: This paper evaluates the performance of the Arab GCC banking industry in the
context of the Structure-Conduct-Performance hypothesis in the period 1993-2002.
The paper uses panel estimation differentiating between bank fixed effects and
country fixed effects. It examines the Relative-Market-Power and the
Efficient-Structure hypotheses differentiating between the two by employing a
non-parametric measure of technical efficiency, and finds that the banking
industry in the Arab GCC countries is best explained by the mainstream SCP
hypothesis. The empirical results do not find any support for the Hicks (1935)
"Quiet Life" version of the market power hypothesis.